Health insurance dropped after company closes

After Dunn Safety Products closed in November, Rebecca Cain wrote Humana a check paying for the insurance premiums of five former employees through the end of November and thought everything was taken care of. It wasn't. (Chris Walker, Chicago Tribune)

It was a gut-wrenching decision to close Dunn Safety Products.

The West Loop business was founded by Rebecca Cain's grandfather 72 years ago and remained a family-run company throughout its life.

As the economy changed, with less emphasis on manufacturing, the company's sales of gloves, hard hats and other safety products declined, Cain said. The family decided to pull the plug last year, closing its doors Nov. 15.

"It's still sort of painful," Cain said.

Determined to treat the company's five employees fairly, Cain emailed Dunn's insurance broker and asked how to handle the workers' health insurance.

Dunn Safety Products paid 100 percent of its employees' monthly health insurance premiums, and Cain wanted to ensure that the workers were covered for as long as possible, she said.

She inquired of the insurance broker whether she could pay the insurer, Humana, through December so the employees could be covered until Jan. 1, when they would be able to get insurance through the state marketplace. Cain was told that because Dunn was going out of business in November, the company's health insurance plan would cease to exist.

As a result, employees also would be unable to pay for COBRA coverage in December.

Her best alternative, she was told by the insurance broker, was to pay the employees' premiums through Nov. 30 and instruct them to get private health insurance starting Dec. 1.

Cain wrote Humana a check paying for the employees' premiums through the end of November and thought everything was taken care of. It wasn't until she received a notice from her eye doctor April 1 that she realized there was a problem.

The letter said Humana had denied her claim for a November appointment because the insurance policy had lapsed.

Cain immediately called Humana, which said that because Dunn Safety Products closed Nov. 15, coverage ceased Nov. 1. A customer service agent said the insurance company had sent her a refund of the November premium, but she said she never received it.

"I explained to the Humana agent that we reached out prior to closing for information on how to properly finalize our account, and we received closing details," Cain said. "I have an email from our agent confirming our coverage ends on Nov. 30, but Humana is uncompromising."

Hoping to get Humana to change its mind, Cain emailed "What's Your Problem?"

"We were a small company, only five employees," she said. "Nonetheless, since I'm starting to receive rejected claim statements, I know my former co-workers are as well."

Cain said her insurance broker suggested she take Humana's refund of the November premiums, then call the former employees and ask what their medical bills were for that month. If the bills amounted to less than the refund, she could come out ahead monetarily.

She refused.

"I would have to call and ask sensitive information of people I worked with for 15 years. I don't even think I can legally do that," Cain said. "I would be offended if someone asked me that. … It's none of my business."

All she wanted, she said, was for Humana to keep her money for the November premiums and pay the employees' claims for that month.

"I'd like to think we tried to do the right thing by our employees," she said. "I just find (Humana's response) truly deceitful."

The Problem Solver contacted Cathryn Donaldson, a spokeswoman for Humana, and forwarded Cain's information. On Friday, a Humana representative called Cain to say the termination date for the company's health insurance policy was reinstated to Nov. 30, meaning all the employees' claims from that month will be processed.

In an email Wednesday, Donaldson said simply that the issue has been resolved.

"Due to HIPAA privacy laws, we can't comment further on the issue," the Humana spokeswoman said.